BusinessBusiness RecoveryBanks to squeeze IVA providers’ fees

Banks to squeeze IVA providers' fees

Code of conduct for banks could see them strangle IVA providers' fees, but some companies are bullish about the plans 

Banks are set to take a tougher line on fees charged to them by IVA
providers, according to reports.

The
British
Bankers’ Association
is expected to reveal a code of conduct for
IVAs at the end of the month that could encourage banks to push for lowers fees
from IVA firms.

And credit provider Capital
One
has written to the providers telling them the company will not
agree to IVAs with fees of more than £4,500 from 4 June, reported The
Times
.

IVA provider
ClearDebt
welcomed the proposal, stating its low fee structure would not be affected
by the move.

‘We have always operated as a low-cost IVA company and have the systems and
culture in place to benefit from this sea-change in the market,’ said Cleardebt
CEO David Mond.

‘This situation was allowed to continue until the gravytrain hit the buffers
earlier this year, partly because IVA fees (which can affect the viability of an
arrangement) were largely hidden from debtors – and partly because, until the
IVA market exploded, the banks and credit card companies appeared to care little
about what they were paying for an IVA.’

Further reading:

Insolvency increases driven by
volunteers

UK insolvency law threatens London’s status as financial
hub

ICAEW provides update on insolvency member
numbers

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